Target’s owned brands celebrated a sales jump in the “mid-teens” for the second quarter, outpacing all sales increases for the retailer that saw growth on top of record growth a year ago.
“Our diverse collection of owned brands continues to grow and provide differentiation across our assortment,” said Christina Hennington, EVP, chief growth officer for Target during the financial call. “In the second quarter, owned brands sales outpaced the company with growth in the mid-teens.”
She added that in the food and beverage category, Good & Gather showed “tremendous growth” and the more recent indulgent cousin Favorite Day delivered encouraging results, adding to owned brands market penetration that increased by 70 basis points compared to a year ago.
The retailer highlighted growth within all five of its key categories, where owned brands play a major role. Leading the way was apparel, delivering “mid-teens growth” on top of "low, double-digit growth" a year ago. The swimwear, kids and young contemporary categories stood out with sales increases in the low-20% range compared with a year ago.
In food and beverage, sales reported “low, double-digit growth,” driven by bakery, cafe and deli, all up 50%, in part due to many bakeries being closed a year ago during the pandemic, although the new Favorite Day private brand certainly added.
Fresh foods were up in the "double digits," thanks to Target’s curbside delivery adding produce and fresh goods. Another standout category was in hardlines, seeing "mid, single-digit growth," compared with a more than 40% jump a year ago. The toys category saw a low-20% increase, an area built up by Target’s Mondo arts and crafts store brand.
In advance of the Ulta partnership taking place next month, Target saw beauty sales increase in the “high, single-digit” for Q2 2021, and the home category reported a "low, single-digit" increase in sales compared with 30% record growth last year.
The category increases joined a Q2 2021 same-store sales growth that registered an 8.9% increase on top of a record-setting 24.3% growth a year ago.
Brian Cornell, CEO and chair of Target, said total sales were up more than 30% or $6.6 billion on a two-year basis.
While digital has been a massive driver for the company, especially during the pandemic, the second-quarter showed shoppers returned to in-store shopping, reporting an 8.7% increase in brick-and-mortar sales for the quarter. Digital still saw a 10% increase in sales for Q2 2021 vs. a 195% record number a year ago.
As for Target’s same-day services, Target’s curbside, Drive Up and Go service is the largest, reporting more sales than its in-store pick-up and Shipt services combined. Sales for the drive-up service were up 55% for the second quarter vs. up 270% last year.
“In the second quarter, our business generated continued growth on top of record increases a year ago, reinforcing Target’s leadership position in retail. We’ve spent years building and investing in the durable model we have today, which is supported by a differentiated strategy and the best team in retail,” said Cornell. “Even after unprecedented growth over the last two years, we see much more opportunity ahead of us, and we’re leaning into opportunities to invest in the long-term growth and resiliency of our business. Our team and operating model can seamlessly adapt to changes in the environment, and we’re well-positioned to deliver outstanding performance in the back half of the year.”